IBT to issue Thailand's first-ever sukuk

Islamic Bank of Thailand will use proceeds to hike capital.

The state-owned IBT plans to increase its capital by US$232 million and issue a US$163 million sukuk, Thailand's first-ever Islamic bond.

The bank said it hoped the bond sale will help it return to profit this year and help the country’s Islamic financial sector grow after tax legislation necessary for its expansion was passed in May 2011.

Under the plan, the bank said it will raise US$30 million in capital this month and US$202 million in the fourth quarter. It will issue the US$163 million subordinated sukuk to increase its capital ratio.

The bank, rated BBB- by Fitch, also said it would seek investors to establish a presence in the Middle East in the next three years, while increasing its domestic network of branches to 130 from 106.